A survey carried out by Standard Life found that 46% of parents felt a strong sense of responsibility to protect their children from financial hardship and debt, but consequently ended up putting themselves in financial harm.
Three in five parents of children aged over 18 years old provided them with financial support for costs such as a house deposit, building up savings, rent, bills, food and university fees. But these acts of generosity were having a detrimental effect on some families’ finances.
Parents’ financial stability affected
Some 75% of parents say providing that support has affected them financially, with over a quarter dipping into savings as a result and a fifth saying they are saving less for the long term. A further one in 10 said this means they have contributed less to their pension than they had hoped, and one in seven expect to retire later than planned, leading to them having a more modest retirement and being more reliant on the state pension.
These longer-term consequences are evident among those parents of over-18s already retired, with a quarter noting that having children was the single biggest factor impacting their ability to save for retirement.
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One in seven parents of children of all ages, however, plan to prioritise enjoying their money in retirement over leaving an inheritance.
Don’t lose sight of financial goals
Mike Ambery, retirement savings director at Standard Life, said: “Life is rarely linear, and like many other milestones, it’s completely normal for pension savings to take a back seat when focusing on supporting children.
“However, at the same time, parents mustn’t lose sight of their own financial goals. Everyone’s journey to and through retirement can be better and understanding where you are in terms of your own long-term finances is also important, to ensure you are heading towards the retirement you envisage.
“This means setting clear expectations with your children about the level of support you can realistically provide, making sure you’re still contributing what you can afford into your pension, and ensuring you’re thinking about how much money you will realistically need for retirement – striking the right balance between supporting children today and staying engaged with your own financial future.”
